# Credit Card Interest Calculator Article byHarsh Katara ## Credit Card Interest Calculator

Credit Card Interest calculator can be used to calculate the amount of interest that shall be levied when the credit card holder repays only the minimum amount or partial amount or doesn’t pay the full amount due.

#### Credit Card Interest Calculator

D * A * I * 12 / 365

Wherein,
• D is the number of days that are counted from the date of purchase.
• A is the total outstanding amount.
• I is the interest rate per month.
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### About Credit Card Monthly Interest Calculator

The formula for calculating the Credit Card Monthly Interest calculator as per below:

Interest =  D * A * I * 12 / 365

Wherein,

• D is the number of days that are counted from the date of purchase.
• A is the total outstanding amount.
• I is the interest rate per month.

After the introduction of plastic money, the lifestyle of people changes, and they started using the credit card especially excessively; and some of them use to clear the entire debt while some use to pay the minimum amount due, and some use to pay the partial amount as per their finance availability. However, they didn’t realize that if the entire amount was not paid then, a heavy interest rate was charged, which enhance their debt. There could be multiple reasons for not paying the entire amount, either due to the unavailability of finance or due to missing the deadline to repay the credit card debt. Because of this, banks earn a large amount of interest on credit card debt since the rate of interest that is charge is quite higher compared to normal personal loans.

### How to Calculate Using Credit Card Interest Calculator?

One needs to follow the below steps in order to calculate the Credit Card Interest.

Step #1: First, the credit card holder needs to determine what is current Credit Card debt outstanding balance, which is nothing but finding out the spending done in the last credit card billing cycle and any opening balance, if any.

Step #2: Now, calculate the number of days since that last transaction date.

Step #3: Determine the monthly rate of interest since the credit card is billed on a monthly basis.

Step #4: Calculate the interest amount by multiplying the amount determined in step 1 by the number of days determine in step 2 and then multiply by a rate of interest determined in step 3.

Step #5: The resultant figure will be the interest that has to be paid on credit card debt.

You can download this Credit Card Interest Calculator Excel Template here – Credit Card Interest Calculator Excel Template

### Example #1

Mr. Le has been using a credit card for a long period of time. Further, for the current credit card billing cycle for which the due date is 6th August, he has done the following transactions:

1. Insurance Payment \$8500
2. Bills Payment  \$175

The transaction date for insurance payment and bill payment was made on 1st July. The Bank levies a 19% rate of interest per annum. Mr. Le has paid 50% of the amount due by 21st July; however, the due date was 26th July.

You have required to calculate the interest that he would be paid by 6th August.

Solution

We will first calculate the credit card outstanding balance per below, assuming that there is no opening balance.

Mr. Le has paid only 50% of the total amount due, which is \$8,675, which is \$4,337.50, and since the entire amount is not paid, Mr. Le would be liable to pay interest on the entire outstanding amount and as well on the transactions till the date of payment.

The number of days on which interest would be paid on the entire amount of \$8,675 will from 1st July till 21st July, which is for 20 days.

Secondly, the number of days for which interest would be paid on the partial amount that is after 1st payment made, which is \$8,675 – \$4,337.50, which is \$4,337.50, will be from 22nd July till 6th August, which is 16 days.

Interest per month will be 19% / 12, which is 1.58%

Now we can use the below formula to calculate the interest that is to be paid on the credit card debt.

Interest = D * A * I * 12 / 365
• = 20 * 8675 * 1.58% * 12 / 365
• = \$90.32

Now we shall calculate interest on the outstanding balance since the 1st payment date which is \$4,337.50 till the next payment cycle which is 6th August i.e. for 16 days.

Interest = D * A * I * 12 / 365
• = 16 * \$4337.50 * 1.58% * 12 / 365
• = \$36.13

Therefore, the total interest that will be due for the credit cycle from 6th July till 6th Aug will be \$90.32 + \$36.13 which is \$126.44.

### Conclusion

It is too appealing for the consumers to buy their favorite products when they get credit in hand and pay on a monthly basis or delay the payment until they can budget the same. Until they repay the entire debt in full, there would be a loss to the consumer as they have to pay interest on the entire outstanding amount until that amount is fully paid and further, they have to bear late penalty charges as well when the minimum amount due is also not paid by the credit card holder by the due date of the card which is again higher charges.

Hence, one should carefully utilize the credit limit according to their credit status and repay the amount on a timely basis or else at least try to pay the minimum amount which due from them, which will avoid paying charges but not interest.

### Recommended Articles

This has been a guide to Credit Card Interest Calculator. Here we provide you the calculator that is used to calculate the amount of monthly interest levied on the credit card holder with some examples. You may also take a look at the following useful articles –